The Trump administration abandoned the Iran deal in May and vowed to re-impose US sanctions against Tehran.  US President Trump warned that companies doing business with Iran will be barred from the US.  Reuters photo.

Swiss government says it regrets US sanctions situation is “deteriorating”

Despite the threat of retaliation from the Trump administration against companies who conduct business with Iran, the government in Switzerland is urging Swiss firms to pursue their business relations with the Islamic Republic.

On Tuesday, US President Trump warned that firms doing business with Iran will be barred from the United States.  The announcement came after US sanctions targeting dollars, metals trading, coal, industrial software and the auto sector took effect.

In May, the Trump administration announced it will walk away from the Iran sanction relief deal that was signed in 2015 by former President Obama and representatives from the UK, France, China, Russia and Germany.

Under the deal, Iran agreed to limit its sensitive nuclear activities and allow in international inspectors in return for the lifting of crippling economic sanctions.

Trump re-imposed the sanctions despite pleas from US allies to not pursue the penalties.

After the announcement in May, European countries hoped they could convince Iran to continue to respect the 2015 agreement and promised to try to lessen the blow of US sanctions and convince their companies to not pull out.

However, Trump’s threat to exclude businesses operating in Iran from working in the US has outweighed European governments’ wishes.

“US decisions on sanctions do not affect the legal situation in Switzerland with regard to Iran,” Fabian Maienfisch of the State Secretariat for Economic Affairs (SECO) told Reuters.

But, the re-imposed sanctions could impact Swiss companies that do have business in Iran.

“Switzerland regrets that the sanctions situation in relation to Iran is again deteriorating,” he said.

Even thought the Swiss federal government says it would defend Swiss economic interests, it adds that it cannot dictate the reaction of companies to the new climate, said Maienfisch.  He added “[The government] recommends that companies pursue their commercial relations with Iran and inform themselves about the situation”.

Nestle, based in Switzerland, is the world’s largest food company.  It produces infant formula, cereal and bottled water in Iran.  The company says it sees no direct fallout from renewed US sanctions on Tehran.